Nubank Reportedly Adds Government Bonds Investments as Collateral Option for Credit Card Limit Increase

Nubank (NYSE: NU), which claims to be one the largest digital banking platforms outside of Asia, announces the expansion of Nu Limite Garantido, which is described as a feature that enables clients to increase their credit card limit.

Gradually, the eligible customer base is reportedly being given the chance to use Tesouro Direto (government bonds) investments held in custody by Nubank as collateral.

Announced in 2023, Nu Limite Garantido enables clients to add resources invested with Nubank to their pre-approved limit, thus improving their purchasing power while also watching their wealth / holdings grow steadily.

The feature used deposits in an exclusive Caixinha (Money Box) designed for this purpose, yielding 100% of the CDI (Interbank Deposit Certificate). Of the total number of customers using Caixinhas, more than 6.7 million employ this tool through Nu Limite Garantido.

The move to allow Tesouro Direto as collateral to increase the limit comes in a context where Nubank registered more than 18 million active investor customers by the end of the Q2 2024.

Rusen Baragiola, head of Nubank’s credit card division said that with this expansion, another step in collateralizing invested resources at Nubank, their customers can use the money invested in Tesouro Direto through the Nubank app to increase their credit card limit simply and transparently.

Rusen added that with a few clicks, the process is completed, thus allowing customers to have more resources on their credit card to “manage their financial plans while their money continues to earn returns,”

In this process of Nu Limite Garantido, it will reportedly not be possible at first to simultaneously use “resources invested in the Money Box and Tesouro Direto.”

Just as customers are able to make recurring investments in Nu Limite Garantido’s Caixinha, they are also able to select the amount already applied in government bonds to convert into an additional credit card limit.

When combining available credit lines (pre-approved and Nu Limite Garantido) for the Nubank card, the maximum total limit has reportedly been set to R$150,000.00.

For the designed experience, if a person holds over one active bond in Tesouro Direto, Nubank selects those with the lowest volatility (determined by type and maturity) and, consequently, the “highest likelihood of being converted into credit limit.”

Eligible government bonds include Tesouro Selic, Tesouro IPCA+, and Tesouro Prefixado (Fixed-Rate), whereas Tesouro Renda+ and Tesouro Educa+ versions are not eligible for this experience.

The customer is said to have control over the use of Nu Limite Garantido, being able to edit the amount or cancel the use of the investment as an additional limit at any time, as long as the “pre-approved limit has not been compromised in the invoice.”

If the credit card invoice is not paid in full or if the minimum amount is not paid within seven days of the due date, Nubank explains that it will automatically activate the value “pointed out as collateral (Caixinha or Tesouro Direto), thereby reducing the customer’s indebtedness.”

To use the Nu Limite Garantido feature – whether via the Money Box or with Tesouro Direto investments – clients would need to access the credit card section in the Nubank app and click on the “My limits” button.



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